Thursday, November 3, 2016

Reinvented KYC Infrastructure for Fund Distribution to Cut Costs by up to 70%

A new Know Your Customer (KYC) solution to support fund distribution is expected soon. Fundsquare leads the works.

LUXEMBOURG - Thursday, November 3rd 2016 [ME NewsWire]

(BUSINESS
WIRE)-- KYC, a process of verifying the identity of investors, is
mandatory in the financial sector and costs an estimated EUR 180 million
annually only for the Luxembourg fund industry1. However, if the
process was pooled, instead of the current client-by-client replication,
the spending could be lowered by 70%, down to EUR 20 million. A working
group comprising 22 of Europe’s leading asset managers and asset
servicing providers is already working on a solution optimising how the
KYC obligations in fund distribution could be addressed.

Fundsquare,
a market infrastructure dedicated to investment funds, initiated the
industry dialogue. “We inquired different players in the sector –
management companies and asset servicing providers – about their KYC
needs. In the next step we listed the requirements of a solution which
would efficiently support the distribution of funds,” explains Olivier
Portenseigne, Managing Director and CCO of Fundsquare. “The resulting
working group is now finalising the specifications for a KYC
infrastructure which will address the real needs of the market,” he
adds.

Since May 2016, the working group, comprising companies
from UK, France, Germany, Ireland, Italy, Luxembourg and Switzerland,
met several times at Fundsquare’s HQ in Luxembourg. Its objective is to
define the modus operandi to meet all KYC requirements raised by the
different market players.

The KYC solution will initially focus
on institutional and retail funds distributed on a cross-border basis
and will then extend to other domestic markets.

The working group
will meet again in the next coming months to define the investment plan
for the realisation of the infrastructure. It should be operational
before the end of 2017.

About Fundsquare

Fundsquare S.A.
was incorporated in June 2013 at the initiative of the Luxembourg Stock
Exchange in order to establish an international market infrastructure
capable of offering services relating to the cross-border distribution
of funds in a standardised, automated manner. The main objective of the
Fundsquare platform is to foster relationships and communication between
professional investors and the funds.

1 Deloitte, https://goo.gl/uqH8Zs

View source version on businesswire.com: http://www.businesswire.com/news/home/20161102006363/en/